Understanding Lim Kit Siang's Revelation on Bank Negara's Foreign Exchange Losses In the year 1993, when Lim Kit Siang held the position of opposition leader, he made a shocking claim that Bank Negara had incurred losses of nearly RM13 billion in foreign exchange.
However, at that time, he did not disclose the source of this information, which raised eyebrows among the members of the Dewan Rakyat. Lim Kit Siang, known for being a scandal chaser, presented facts and figures that were not publicly available, leaving other MPs surprised. He emphasized that the central bank's total losses ranged from RM10 billion to RM12.8 billion, which was an immense sum equivalent to the government's entire year of development expenditure.
To provide context to the public, he stated, "RM10 billion is so colossal that it is impossible for the man in the street to grasp its size. If this sum were to be divided equally among the 18 million Malaysians (the population then), each would get RM555." After a span of 30 years, in the second volume of his biography titled "Lim Kit Siang – Malaysian First," Lim revealed that it was former finance minister Tengku Razaleigh Hamzah who informed him about the losses.
However, he expressed his belief that Tengku Razaleigh should have brought this matter up in Parliament since he would have had more knowledge on the topic. Nevertheless, Tengku Razaleigh believed that the opposition leader should be the one to expose the scandal. According to Lim's analysis, Bank Negara incurred these significant losses when it invested billions of ringgit in purchasing the British pound and other European currencies with hopes of making substantial gains. However, these currencies experienced a crash in 1992, resulting in the incurred losses.
Lim Kit Siang called for a royal commission of inquiry and placed the blame on Dr Mahathir Mohamad, the prime minister at that time, and Anwar Ibrahim, who served as the finance minister. He demanded that they take full and personal responsibility for the fiasco. Despite his repeated calls for an inquiry, his pleas went unanswered, even though he claimed that the losses could amount to RM30 billion. Following Lim's revelations, Nor Mohamed Yakcop, the Bank Negara official who held sole authority over forex trading was transferred, and the bank's governor, Jaffar Hussein, resigned. In 2017, a royal commission was finally established by then prime minister Najib Razak, albeit under different political circumstances.
Mahathir had joined the opposition in preparation for the general election the following year. The 528-page report issued by the inquiry concluded that Anwar, as finance minister, had misled the Cabinet, while Mahathir was believed to have given approval for the misleading statements made by the finance minister. Contrary to Lim Kit Siang's expectations, this did not serve as a vindication for him. Instead, he faced significant criticism due to his association with the individuals targeted by the inquiry.
Mahathir had been asked to lead Pakatan Harapan in preparation for the 2018 elections, and Anwar had founded PKR, which was a partner of DAP in the Pakatan Harapan coalition. As a result, Lim Kit Siang found himself in an awkward situation where his moral and political consistency came under intense scrutiny, as noted by Kee Thuan Chye, the author of the biography.
Lim Kit Siang's revelation about Bank Negara's foreign exchange losses in 1993 shocked the nation. Despite facing criticism, his claims were ultimately substantiated by a royal commission established in 2017. However, his association with the individuals implicated in the inquiry raised questions about his moral and political consistency.
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